Archive Page 2

The Problem:
With rapidly falling barriers to entry, competition among online businesses is more intense than ever. How does a new company in an established market gain the trust and customer volume needed to succeed?

The Company:TradeKing, an online discount brokerage site that launched in late 2005.

The Technology Solution:
As a new company entering a seemingly saturated market for online stock trading, founder and CEO Donato A. Montanaro, Jr. launched TradeKing in 2005 with the tag line: “No Minimums, No Catches, No, Seriously.” Taking a low-price approach ($4.95 per trade and 65 cents per option contract) combined with high-tech online tools, TradeKing provides do-it-yourself investors with the power to efficiently and economically “work the Street” with market snapshots, volatility charts, technical analysis based on pattern recognition technology, and research reports on a 24/7 basis.

However, Montanaro didn’t rely on the “if you build it, they will come” philosophy that snares so many budding Internet entrepreneurs. Instead, he used the TradeKing site as a hosting point for multiple blogs, discussion lists, chatrooms, and trading clubs. As he stated in an August 2007 video interview for the Reuters international news service, “Clients who socially network more, trade more.” Montanaro’s premise must be correct, because the site has been dubbed the fastest growing company in its industry.

The Outcome:
For two years in a row, TradeKing has been rated the #1 discount broker by the editors of the Wall Street Journal’s SmartMoney magazine. The Dow Jones magazine Barron’s listed TradeKing among the top five in its March 2007 online broker survey. And if imitation is indeed the sincerest form of flattery, then newcomers such as Zecco.com provide further proof that TradeKing’s community-based business formula is worthy of duplication.

But such mimicry forces TradeKing to embrace continuous technology development to stay one step ahead of its competition. With new product offerings, such as the May 8th, 2008 introduction of Fixed Return Options heralded by Montanaro ringing the opening bell at the New York Stock Exchange, TradeKing appears ready to meet its challengers head on…because resting on one’s laurels is not an option in the age of social networking.

TradeKing is only one company that has tapped into the power of online communities. Tomorrow’s mini-case at DataDocsDailyDose.com will provide you with a look at a very different start-up company that leveraged social networking in a very different way.

–J.D. Mosley-Matchett, Ph.D.“The Data Doc“You have questions? She has answers!

The Problem:
Software is not a magic wand. If a company adopts a program that is designed to integrate its various functional areas, the managers must ensure that the company’s people are provided with adequate incentives to take advantage of the anticipated efficiencies. Unless the company’s managers help their staff embrace new technology, the result can become a communication blockade with inefficiencies spanning the organization.

The Company:
Researchers Majed Al-Mashari and Mohamed Zairi at the University of Bradford in the United Kingdom examined the efforts of a major Middle-Eastern manufacturing company that they code-named Manco.

The Technology Solution:
These researchers investigated Manco’s failed efforts to implement SAP, a sophisticated enterprise resource planning (ERP) system. SAP is a computer-based system that unites the information used throughout a company. In that way, diverse departments such as accounting, inventory, sales, and distribution can tap into a single, integrated data model and boost efficiency across the company.

The Outcome:
Although the promise of seamless information sharing throughout a company makes perfect sense on paper, turning the concept into reality may not be a simple effort when the company’s culture isn’t flexible enough to accommodate new and interactive procedures. As the researchers noted, “Unlike many software installations, SAP R/3 installation is a difficult undertaking in that its success necessitates managing adequately a complex context, which involves organizational changes across various key areas related to strategy, technology, culture, management systems, human resources, and structure.” Unfortunately, Manco focused on the technical aspects of the software implementation without adequate attention paid to the other managerial issues.

As a result, instead of using SAP to become a more customer-focused, efficient, and cost-effective competitor in its market, Manco discovered that its responsiveness, reliability, and manufacturing effectiveness plummeted.

The first decision that triggered Manco’s problems occurred when the company Manco tapped for its SAP support recommended a more robust IT infrastructure to facilitate SAP’s complex applications. The company spent $2.8 million to implement SAP, only to achieve a negative return on its investment (ROI).

The key factor underlying the failure stemmed from Manco’s management team underestimating the impact of employee anxiety. When top management first evaluated the expected ROI, much of the savings offered by SAP was based on a resulting reduction in Manco’s labor force. In other words, the people who were expected to help integrate SAP were the very people the software would eventually make redundant. Although there were other issues that further contributed to the failure of Manco’s SAP adoption, it was this initial misstep that represented the fatal flaw.

This was a clear case of how a lack of internal communication can cost a company dearly. The next case study at DataDocsDailyDose.com will show you how communication improvements not only improve employee morale, but also improve the corporate bottom line.

–J.D. Mosley-Matchett, Ph.D.“The Data Doc“You have questions? She has answers!

The Problem:Everyone knows that the fastest way to grow a new business is to generate positive word-of-mouth references. But, what’s the most efficient way for a start-up online company to do that?

The Company:YouTube allows people to share their videos online and became the fastest growing website in the history of the Internet. Its growth was so impressive that it was acquired in 2006 by Google for $1.65 billion in stock.

The Technology Solution:
How does a startup come out of nowhere and in 18 months get purchased for more than any other online company? It does it by generating more traffic than anyone else. On an average day, YouTube serves more than 100 million video streams.

Although many success factors assisted the rise of YouTube’s traffic, researchers Deepak Thomas and Vineet Buch concluded in 2007 that the company owed much of its phenomenal growth to the use of widget marketing. On the Internet, a widget is a small software program that is designed to be easily inserted into a webpage to provide some added function. There are widgets that are self-contained games, widgets that display late-breaking news items, and widgets that are simply designed to attract attention. You can even create a widget to display the latest entry from your weblog on another website.

By making it easy (through the use of widgets) for visitors to embed YouTube hosted videos on their personal blogs and websites, the site also made it easy for its users to introduce new people to the joys of online video viewing.

The Outcome:

The buzz generated by the clever videos people hosted on YouTube created an escalating flow of traffic to the site. Even better, the resulting incoming links from widely dispersed YouTube widgets on a multitude of websites further boosted YouTube’s Google page ranking. In the end, that flow of traffic became worth more than a billion dollars in less than two years.

But what can you do if the customers who most need what you sell are stubbornly resisting your marketing efforts? Tomorrow, DataDocsDailyDose.com will show you how the world’s largest car manufacturer has learned to help customers who don’t want to admit they have a problem.

–J.D. Mosley-Matchett, Ph.D.“The Data Doc“You have questions? She has answers!

The Problem:
Is there a way to eliminate the cost of reaching perfectly targeted customers who have never heard of your company?

The Company:Scuba.com is an online retailer of scuba diving equipment and accessories, physically located in Irvine, California.

The Technology Solution:
The easiest and least expensive way to generate sales is to get lots of people who know the customers you’re trying to reach. Then get those people to tell all those potential customers how great your company is. After that, you have to convince those people to sell your products for you and only paid them after they’ve made a sale. Of course, the trickiest part is to find such well-connected salespeople who will enthusiastically work under those conditions.

Back in the 1960s, Mary Kay Ash launched a beauty products empire by enabling housewives to sell her cosmetics to their friends and neighbors. Even though those women weren’t seasoned salespeople (at first), the company found that personal enthusiasm and great corporate sales support can make up for all kinds of individual deficiencies.

Today, scuba.com has adopted the Mary Kay sales concept to boost sales, but added a technological twist to ease the sales process. As an online retailer of scuba diving equipment and supplies, scuba.com sells at higher volumes than most neighborhood dive shops. The higher sales volume allows scuba.com to negotiate better wholesale prices, which translate into lower retail prices.

However, scuba equipment lasts for many years. So to continue expanding sales volume, scuba.com must gain sales from recently trained scuba divers who don’t already own regulators and buoyancy compensators. And the best way to reach the hearts and minds of those new divers is to approach them via their instructors.

The Outcome:
Scuba.com provides instructors with an easy way to introduce their students to the website. The scuba.com website allows diving instructors to build their own webpage complete with the equipment recommendations they want to pass along to their students. That targeted word of mouth by the instructors is rewarded with a 3% store credit based pm the value of each student’s purchase.

As a result, scuba.com gets the referrals and the sales without having to pay salaried salespeople. The constantly increasing number of sales keeps scuba.com’s prices low, so the students receive great value for their money. And the instructors benefit by being rewarded with store credits, providing them with more incentive to lead each new class of students to their scuba.com pages.

This electronic sales tool simplifies the Mary Kay formula and whisks it into the 21st century. Next time, DataDocsDailyDose.com will examine a strangely named technology that helped to create a virtual storm of online traffic.

–J.D. Mosley-Matchett, Ph.D.“The Data Doc“You have questions? She has answers!

The Problem:
How do you reduce the cost of developing sales leads among upper-level decision makers without sacrificing communication quality?

The Company:Softrax, an enterprise software company based in Canton, Massachusetts, sells its revenue cycle automation program to top-level corporate executives.

The Technology Solution:
By offering prospective customers access to free online seminars, businesses can simultaneously attract and educate highly targeted audiences. At one time, conducting a presentation via the Internet (also referred to as webcasting) was an extremely complicated and expensive proposition. But all that has changed with the growing availability of broadband communications, faster computers, and the widespread use of such multimedia accessories as cameras, headphones, and microphones.

In fact, many industry experts have declared that webcasting is poised to utterly eliminate physical world conferences and seminars. Besides the simple convenience of gaining access to the top decision-makers in multiple companies with a single presentation, webcasts also reduce travel, printing, and communication expenses.

The Outcome:
Instead of handling the webcasting task in-house, Softrax decided to rely on the expertise of ON24, a webcasting company that provides full video production and data capture capabilities. The collaboration allows Softrax to concentrate on providing cutting edge content, delivered by industry experts that the targeted executives want to hear. Meanwhile, ON24 ensures a seamless technical experience to enhance Softrax’s image as a sophisticated industry leader.

As a result, Softrax has found that the webinars it produces several times a month have become valuable generators for highly targeted and motivated sales leads.

Tune in tomorrow when DataDocsDailyDose.com will see how borrowing ideas from the past and updating them with today’s technology turned an ordinary retailer into a marketing powerhouse.

–J.D. Mosley-Matchett, Ph.D.“The Data Doc“You have questions? She has answers!

The Problem:
Mailing lists are great, but how do you change the people who read your company’s e-mails into an interactive and responsive audience of fans anxious to pass your message along to their friends?

The Technology Solution:
In March 2005, Garden Fresh created its Club Veg program to provide interested customers with e-mailed information about special offers and monthly food themes. The program became a hit with more than half a million people registered. In 2006, the company began using its e-mail communications to direct club members to the website.

In 2007, the company launched an eight-week “Passport Promotion” that provided club members with two-week promotions for each of four cuisines reminiscent of Greece, Italy, Mexico, and Asia. This time, an interactive website activity allowed members to personalize themed postcards and electronically send them to friends as invitations to dine at a Garden Fresh restaurant together.

The Outcome:
When the company first tried using the Club Veg mailing list in August 2006 to direct members to the website, the site’s traffic nearly doubled. The Passport Promotion showed the value of frequent theme changes that keep customers’ interest levels high and response rates lively. But most important, the interactivity boosts customer loyalty and promotes open communication.

Garden Fresh uses the Club Veg program to reward its most loyal guests with coupons, chances to win free meals, and recipes. Tomorrow DataDocsDailyDose.com will see what online seminars can do to boost your bottom line.

–J.D. Mosley-Matchett, Ph.D.“The Data Doc“You have questions? She has answers!

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The Data Doc makes house callsto cure your business ills. If your firm could benefit from an expert in research, data analysis, copywriting, proofreading, video production, audio recording, and podcasting, or if you simply need help figuring out what's ailing your company,contact the Doc by e-mailingJD at DataDocsDailyDose.com for fast relief.

Dr. J.D. Mosley-Matchett

As advisor to a broad range of clients, including IBM, Texas Instruments, and J.C. Penney, Dr. Mosley-Matchett combines both practical experience and advanced training in modern marketing methodologies. Her background includes multimedia and video production, Web development, and the latest in marketing research methodologies. Internationally recognized as a published author and noted researcher, Dr. Mosley-Matchett has been a member of the graduate faculty at the University of Texas at Arlington and has conducted numerous seminars on a variety of marketing topics for the International Institute for Research, various conferences, and numerous professional organizations. She currently serves as the Managing Director for Words & Images, Ltd., an interactive communications development firm located in the Cayman Islands.